Quick Summary:
- The Ghanaian cedi has appreciated over 42% against the U.S. dollar in 2025.
- Ghana’s eight-pillar strategy is driving economic growth and policy stability.
- Inflation fell to 18.4%, and prices of goods, fuel, and services are decreasing.
- Experts say sustained governance and structural reforms will determine long-term success.
Defying expectations, the Ghanaian cedi has appreciated by more than 42% against the U.S. dollar since January, making it the world’s best-performing currency in 2025.
This remarkable rally has boosted investor confidence, reduced inflation, and revived economic momentum across the country.
What’s Driving the Cedi’s Rise?
A Shift in Governance and Economic Focus
Ghana’s currency strength seems to stem from more than just market forces.
Under President John Dramani Mahama, the country is experiencing a strategic shift focused on real economic growth and social development, moving beyond short-term fixes.
Mahama’s Eight-Pillar Economic Strategy
At the core of this shift is an ambitious economic framework built on eight pillars:
- Completing the IMF program with fiscal discipline
- Reopening capital markets
- Strengthening sovereign wealth and local government financing
- Clearing arrears and improving public investment
- Reforming public financial management
- Boosting exports via the Ghana Exim Bank
- Positioning Ghana as a regional trade hub
- Reviving infrastructure development
IMF Progress and Economic Gains
These policies are starting to pay off.
Ghana is on track to exit the IMF program by May 2026. The IMF confirmed that Ghana met its debt-to-GDP target of 55% three years ahead of schedule and surpassed international reserve goals, reaching GH¢10.6 billion by April 2025.
The cedi’s strength has also helped cut Ghana’s debt by about GH¢150 billion.
GDP growth hit 5.4% in the first quarter, reinforcing the narrative of recovery.
Bank of Ghana’s Role in Stabilizing Inflation
The Bank of Ghana has played a pivotal role in currency and inflation management.
In March 2025, it raised the benchmark interest rate to 28% from a peak of 30% in 2023.
Between January and April 2025, it absorbed GH¢79.8 billion in liquidity, a 76.6% increase from the same period the previous year.
These decisive actions have driven inflation down to 18.4% in May, the lowest in three years.
Everyday Impact: How Ghanaians Are Benefiting
Lower Prices Across Key Sectors
The stronger cedi is directly improving the cost of living:
- Industrial machinery prices have dropped by up to 48%
- Fuel prices fell by about 15%
- Transport fares reduced by 15% in May
Food and Commodity Price Drops
- A bag of “Dubai” rice: GH¢460 → GH¢370
- 50kg bag of imported rice: GH¢950 → GH¢750
- Cooking oil per gallon: GH¢1,000 → GH¢680
- Cement per bag: GH¢120 → GH¢82
These changes are easing the financial burden on Ghanaians and improving purchasing power.
What’s the Ideal Exchange Rate?
President Mahama has emphasized that balance is key.
While a strong cedi benefits imports, it can hurt exports. He suggests an optimal exchange rate range of 10 to 12 cedis per U.S. dollar to protect Ghana’s trade competitiveness.
Long-term currency strength will depend on more than interest rates—it requires sustained governance, economic reforms, and trust.
Key Drivers of Ghana’s Currency Performance
- A government committed to real, inclusive growth
- Substantive reforms beyond appearances
- Transparent governance that builds investor trust
This approach is encouraging local investment, reducing capital flight, and building economic confidence.
Is the Cedi’s Rise Here to Stay?
Many analysts believe Ghana’s rally is more than temporary.
Structural Strengths Behind the Rally
- The Bank of Ghana’s Gold4Oil and GoldBod programs increased gold reserves by 40.6% in a year.
- Exporters must convert 20% of gold proceeds to cedis, supporting forex stability.
- Phasing out taxes like the E-levy and the COVID-19 levy improved fiscal credibility.
- Ghana’s debt restructuring provided forex relief, with the next major repayment not due until July 2025.
- In April, the central bank injected $490 million into the forex market to further stabilize the cedi.
Can Ghana Keep the Momentum?
Ghana’s recovery looks promising, but sustainability will require continued discipline, policy consistency, and public trust.
If this trajectory holds, Ghana could become a model for economic revival through transparent governance and strategic reforms.
But, as some experts put it, “the jury is still out.”